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As a continuation of initiatives begun during NorthWestern Corp.'s recent Chapter 11 bankruptcy process, local government-backed pubic power advocates in Montana and South Dakota decided late last month to join forces in ongoing efforts to structure a public-sector purchase of the company, whose principal electric and natural gas utility operations are concentrated in those two states. The company had no comment since there is no formal proposal in play, a spokesperson said Tuesday.

Noting that the separate efforts in Montana among five cities and in South Dakota among 22 towns were "nothing new," NorthWestern's Sioux Falls, SD-based spokesperson Roger Schrum said, "There is no formal proposal so there really is nothing to comment on."

Last year, individual coalitions of cities and towns were formed in each state respectively -- Montana Public Power Inc. and South Dakota Power Co., being the two entities created -- to push for purchase of NorthWestern's utility operations in each state. Last Friday, they announced they were combining their efforts.

The cooperation agreement calls for a sharing of costs, including the potential due diligence and other legal work involved in making a bid for the private sector utilities. If the joint cities' bid were to be accepted by NorthWestern, bonds would be sold to finance the purchase and paid off by part of subsequent retail utility revenues.

While noting that the efforts are "still a long way" from being able to make a serious offer, Missoula, MT Mayor Mike Kadas, who chairs Montana Public Power, told local news media that the two-state effort is "one of the key pieces" needed to allow the purchase of the company's entire utility operations, presumably also including NorthWestern's Nebraska natural gas utility operations.

Montana's five cities forming the power company -- Great Falls, Helena, Butte and Bozeman, in addition to Missoula -- are pushing public ownership of the utility as critical to future "economic and financial stability" in the states.

Since NorthWestern emerged from Chapter 11 last fall with a new set of shareholders, the public power advocates argue that the company's new owners aren't interested in the long-term operations of the company, but are investment firms that buy distressed companies, guide them through Chapter 11, and sell their interests to make quick profits. The cities estimate they collectively can buy the utility operations without having to raise retail rates.

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